The Reasons For The Wet Seal's (WTSL) Double-Digit Losses

NEW YORK (TheStreet) -- Another day, another retailer crushed in a sell-off. After Express  (EXPR) fell 22% on Wednesday, Thursday's target was The Wet Seal (WTSL), which plummeted 14.1% to $2.74 by market close.

The apparel retailer, which reported after the bell Wednesday, posted net sales of $127.7 million, nearly 6% lower than a year earlier and missing Thomson Reuters' consensus by $6.8 million. Net loss of 12 cents a share was as expected.

Comparable-store sales were up 0.8%, which included a 1.7% increase at Wet Seal-branded stores and a 6.7% drop at Arden B.

The Foothill Ranch, Calif.-based business didn't forecast positive earnings over the holiday season. For the fourth-quarter ending January, management expects a net loss between 14 cents and 17 cents a share, much worse than a one-cent profit consensus. Total sales are expected in the range of $134 million to $137 million. At the top end of guidance, the forecast is 15% lower than a year earlier and $13.2 million less than analysts had hoped for. The company explains the drop as a result of a 13-week quarter, one week less than in 2012. Comparable-store sales are anticipated to drop in the high-single to low-double digits. "We've had a challenging start to the season, reflecting the difficult macro environment and ongoing softness in mall traffic, which is causing us to maintain a cautious outlook for the remainder of the year," said CEO John Goodman in a statement. --Written by Keris Alison Lahiff. Also see: The 10 Drunkest States in America... and the 10 Most Sober.

Midsize businesses may be hit hardest by health…

The new year will bring tough new health care decisions for many businesses, especially those that are too small to easily absorb new costs and too big to think about dropping coverage, experts say.

These midsize businesses, particularly those with 50 to 200 workers, are having the toughest time affording escalating health care costs, says Nancy Taylor, a health care lawyer with Greenberg Traurig.

"I'm most worried about them," she says.

Federal regulators define small businesses for the purposes of the Affordable Care Act as those with 50 or fewer employees, so a midsize company by some definitions could be one 51 or 1,000 or more workers. A mandate for businesses with 50 or more employees to provide insurance to all full-time employees was delayed for a year. But businesses are already bracing for 2015.

Three ways midsize employers are feeling it:

•Taxes and fees. Most of the largest employers are self-insured, which means the companies cover employees' claims, while insurance companies help administer the plans. Starting in 2014, businesses that are fully insured -- as opposed to self-insured -- will be hit with an $8 billion tax that is estimated to add 2%-3% to premiums for each covered employee. This tax is expected to increase every year for the next several years. By 2018, It's expected to be about 4%. A so-called reinsurance fee of $63 for every person covered by a plan also kicks in for the new year.

These additional costs have prompted employers to add restrictions such as dropping coverage for working spouses who can get benefits at their own companies.

•Premium increases. A November survey of more than 2,800 employers by consulting firm Mercer showed health cost growth slowed among employers of all sizes. For those with 10-499 employees it rose by about 1%, while among very large employers – those with 5,000 or more employees – it rose 3.7%. Most employers expected costs to go up more in 2014, in part because fewer employees will waive cov! erage due to the new mandate that everyone have insurance.

But some midsize employers saw 20%-30% premium increases this year, says Russ Carpentieri, an insurance broker with Opus Advisory Group in Rye Brook, N.Y. He acknowledged many large increases can be negotiated down.

Insurers "are so super conservative right now that they're exploiting the opportunity and pricing up dramatically," Carpentieri says. "There's no rhyme or reason; it's not like there is such increased risk in healthcare."

But Robert Zirkelbach, spokesman for trade group America's Health Insurance Plans, say "premiums are not set arbitrarily" and are closely regulated by state and now federal officials.

"Health care costs continue to increase every year," Zirkelbach says. "Premiums reflect those underlying cost increases."

•Challenges getting insurance. It's becoming increasingly hard for some midsize businesses to even find insurance carriers willing to cover them. As insurance premiums and deductibles rise, many lower-paid employees are opting out of insurance and insurers often require a certain level of employee participation to take on companies, Taylor says.

These and other factors may combine to persuade more smaller- and medium-size employers to turn to self-insurance, says Sandy Ageloff, health and group benefits leader for the Southwest with benefit consulting firm Towers Watson. Companies see it as a way to "mitigate the cost impact of the Affordable Care Act," Ageloff says.

In a fully insured marketplace, insurers dictate price and companies have little control over the design of their plans, Carpentieri says. A midsize company might pay a major insurer $1 million a year, have low claims and still face a 15% increase the following year, he says.

Self insurance can save money for employers and employees, but it adds a lot more risk and potentially a lot more cost, especially if several employees at smaller firms develop costly health conditions. That could lead the companies! to shift! more costs onto the workers in the form of higher premiums and cost sharing.

"While a new year comes with promise, 2014 may prove to be a challenging one for midsize employers as they continue to navigate health care reform, exchange options and health care cost increases, which often impact them the most," says Craig Maloney president of health care services company Univers. "The confusion will require innovation on multiple levels to enable employers to help employees and their families."

Mario Gabelli’s Three Real Time Buys

As reported by GuruFocus Real Time Picks, Mario Gabelli reported three of his real time buys occurring over the past couple of weeks. The guru bought into one new company and increased his position in two others.

L.S. Starrett Company (SCX)

Last week Gabelli increased his holdings in L.S. Starrett Company where he upped his stake 31.9%. The guru purchased a total of 81,142 shares at an average price of $11.13 per share. Since then the price per share has increased about 1%.

Gabelli now holds on to 335,500 shares of L.S. Starrett, representing 4.93% of the company's shares outstanding. Gabelli is now the second largest guru shareholder to Chuck Royce.

Gabelli's historical holding history:

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L.S. Starrett is engaged in the business of manufacturing over 5,000 different products for industrial, professional and consumer markets. The company's products include precision tools, electronic gages, gage blocks, optical and vision measuring equipment, custom engineered granite solutions, tape measures, levels, chalk products, etc.

L.S. Starrett's historical revenue and net income:

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The analysis on L.S. Starrett reports that the company has issued $22.51 million of debt over the past three years, its revenue has been in decline over the past year and its price is at a 1-year high.

The company upped their dividend in June, bringing the company's dividend yield up to 3.50%.

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L.S. Starrett has a market cap of $77.7 million. Its shares are currently trading at around $11.25 with a P/S ratio of 0.30 and a P/B ratio of 0.60. The company had an annual average earnings growth of 32.30% over the past five years.

Strattec Security (STRT)

Last week Mario Gabelli incre! ased his position in Strattec Security. The guru increased his position 4.82% by adding a total of 13,136 shares to his holdings. He bought these shares at an average price of $43.15, and since then the price per share has increased approximately 5%.

Gabelli now holds on to 285,647 shares, representing 8.58%of the company's shares outstanding.

Gabelli's historical holding history:

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Strattec Security Corporation designs, develops, manufactures and markets mechanical locks, electro-mechanical locks, latches and related security/access control products for major North American and global automotive manufacturers.

Strattec Security's historical revenue and net income:

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The analysis on Strattec reports that the revenue has slowed over the past year, their interest coverage is comfortable and their price is nearing a 5-year high. Also over the past three years, Strattec has issued $2.25 million of debt.

The company recently released its first quarter fiscal 2014 results which reported:

· Net sales of $79.6 million, up from $70.8 million last year.
· Net income was $3.211 million, compared to $2.67 million in the prior year.
· Diluted EPS of $0.91, up from $0.78.
· Gross profit margin was 18.2%, compared to 19.4% last year.

Strattec Security designs locking systems for Chrysler Group, General Motors, Ford Motor, Tier 1, OEM customers and Hyundai/Kia.

Strattec also recently declared a dividend of $0.11 per share. This dividend is payable on Dec. 27 to shareholders of the record as of Dec. 13, 2013. This dividend represents a 10% increase from its previous quarterly distribution.

The Peter Lynch Chart suggests that the company is slightly overvalued:

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Stra! ttec Security Corp has a market cap of $150.3 million. Its shares are currently trading at around $43.50 with a P/E ratio of 15.80 and a P/S ratio of 0.50.

Edgen Group (EDG)

Gabelli made his first buy into Egden last week, buying 339,154 shares. The guru bought these shares at $12 per share. He holds 0.78% of the company's shares outstanding, and his new buy makes him the only guru shareholder with a stake in Edgen Group

Edgen Group Inc is a global distributor of specialty products to energy sector, including steel pipe, valves, quenched & tempered & high yield heavy plate, and related components.

Edgen Group's historical revenue and net income:

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The analysis on Edgen reports that the company's revenue has been in decline over the past three years, the price is at a 2-year high of $12 per share and the company's inventory has been consistently building up.

On Oct. 22, several major law firms announced that they would be examining claims regarding breaches of fiduciary duty by the Board of Edgen in connection with their sale of the company to Sumitomo Corporation. The firms believe that there was a potential breach of fiduciary duties in connection to the sale of their company to the Japanese-based company. The cash deal was valued at $520 million, and under the proposed transaction Edgen shareholders will get $12 per share, but many believe that the price should be set at $15 per share.

Edgen Group has a market cap of $519.8 million. Its shares are trading at around $12 with a P/E ratio of 44.20 and a P/S ratio of 0.10.

Check out more of Mario Gabelli's real time picks here.

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Related links:Mario Gabelli's real time picksTry a free 7-day premium membership trial to see the most updated GuruFocus Real Time Picks

Cisco Stock Could Dive by 15% Due to New Threats

Cisco Systems Inc. (NASDAQ: CSCO) is involved in yet another internal restructuring of sorts, and the company has done what it can to manage its shares higher and higher. In fact, shares were up a sharp 28% year-to-date before Thursday. Now a new wave of networking coverage from Credit Suisse is casting a dark shadow on Cisco, and the implication is that shares could fall some 15%, if the thesis turns out to be accurate.

Credit Suisse initiated new coverage on shares of Cisco with a very unambitious Underperform rating. The firm issued a $21.00 price target, versus a $24.80 closing price on Wednesday.

Analyst Kulbinder Garcha believes that software-defined networking is going to be a threat to the traditional networking giants. He still thinks that Cisco is a high-quality company, but it also may be the most vulnerable of the old oligarchy. His biggest concern is that software-defined networking will shrink gross margins, even as Cisco tries to increase its services in the revenue mix.

Cisco has traded in a 52-week range of $16.68 to $26.49, and the consensus analyst target price is $26.77, according to Thomson Reuters. Its shares were down 1.2% at $24.48 in early Thursday morning trading. The call also was negative, or at least cautious, on two others.

Juniper Networks Inc. (NYSE: JNPR) was started as Neutral. Its assigned price target was $20.00, versus a $21.66 close on Wednesday. Juniper shares were down only 0.4% at $21.58, against a 52-week range of $15.62 to $22.98. We would caution that the $20.00 price target is only marginally lower than the consensus price target of $21.32.

Ubiquiti Networks Inc. (NASDAQ: UBNT) was given a cautious Neutral rating as well, and it had the least negative bias in Garcha’s call. He said:

We believe that Ubiquiti has created a relatively unique business model that can disrupt several markets in the networking space over time. However, we believe shares are fully valued, with strong near-term revenue momentum offset by medium-term competitive risks and possible margin pressure.

His target price of $33.00 was barely under the $33.14 closing price on Wednesday.

Trend Channel Bounce Trades

These stocks are in strong upward trend channels, but are currently trading near the lower support line. If the channel holds, there is potential for "trend channel bounce trades," as the price rallies off support and heads back toward the top of the channel. Typically these trades are low risk, since the entry point is near the support line and stop-loss price.

Baxter International (NYSE:BAX) has been moving higher within a well defined trend channel since the start of the year. The lower channel line currently intersects near $68.75, although it looks like the stock may already be heading higher before reaching that level. On August 2 Baxter made an intra-day low of $69.31, before reversing course and closing August 6 at $72.03. The upper channel line intersects near $75, which is an area of likely resistance. The risk/reward on this trade isn't ideal given that the profit potential is about $3 and the risk is also about $3 if a stop is placed slightly below $69.31. Therefore, if already long there is likely more upside, but if you're looking to get long being patient and waiting for a bit of a pullback is likely the best option.



United Parcel Service (NYSE:UPS) started its current trend channel in February. The lower channel line is at $86, so I'd be looking to go long anywhere between $87.50 and $86, with a stop-loss order in the $85.50 area. The upper channel line intersects near $93, so the profit target for the trade is just below this. Other than a price surges in May and July though, the price action has been fairly sedate. Therefore, the price will need to breakout above $89.25 resistance in order to potentially reach the $93 target.



SEE: Target Prices: The Key To Sound Investing

Boeing (NYSE:BA) has been in a very strong advance since March, but is currently heading toward the lower part of the rising trend channel. Channel support is at $103.25, so entry between $103.25 and $105 is looking really good. I'd put a stop near $103 and a target near the upper channel line at $113



Interpublic Group (NYSE:IPG) isn't near it's lower channel line right now, but it looks to be heading there. Toward the end of July the stock broke higher out of the trend channel and then quickly reversed, indicating selling pressure near channel resistance. Therefore, a pullback toward $15, and channel support, is possible. I'd look to get in anywhere between $15 and $15.50 with a stop-loss just below $15. The target is the upper channel line and resistance just above $17.



SEE: Trading Is Timing

The Bottom Line
Trend channels highlight rhythmic movements in price. As long as the channel holds, these movements are exploitable by buying near the lower channel line and selling near the upper line. Channels don't last forever though, so a stop-loss order should be used to control risk. Also, it is recommended that you wait for the price to begin moving higher off the lower channel line before going long. This provides a little extra assurance that the support level has held and that the price will likely start to head back toward the upper channel line.

At the time of writing, Cory Mitchell did not own shares in any of the companies mentioned in this article.

Charts courtesy of StockCharts.com.

Why the Market Loves Yahoo

The following video is from Wednesday's Investor Beat, in which host Chris Hill, and analysts Jason Moser and Matt Argersinger, dissect the hardest-hitting investing stories of the day.

Yahoo's (NASDAQ: YHOO  )  second-quarter earnings rose 46%, but the company missed on revenue, as advertising took a hit. Despite the expectations miss, the stock continues to rally. In this video, Matt and Jason discuss why CEO Marissa Mayer continues to drive so much investor confidence, and what we can expect from her and the company as she enters her second year as Yahoo's first in command.

It's incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out "Who Will Win the War Between the 5 Biggest Tech Stocks?" in The Motley Fool's latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

5 Best Blue Chip Stocks To Buy Right Now

There was big news out of the market for dividend and income investors last week. Two of the bluest blue chips, Microsoft (MSFT) and McDonald's (MCD), both announced big dividend increases.

Microsoft pleased the Street with a 22% increase to its dividend, climbing to $1.12 annually that equates to a current yield of 3.4%. Microsoft also announced another $40 billion share buyback program to replace its existing $40 billion authorization that is set to expire on Sep 30. McDonalds announced a dividend increase of its own, raising its payout by 5% to 81 cents per share, lifting its current yield to 3.3%.

But that got me thinking: Which companies from the S&P 500 are the most shareholder friendly, with the biggest dividend increases in the last 5 years? Here is a list of the top 5 companies from the last 5 years with the biggest dividend increases.

5 Best Blue Chip Stocks To Buy Right Now: Philip Morris International Inc(PM)

Philip Morris International Inc., through its subsidiaries, engages in the manufacture and sale of cigarettes and other tobacco products in markets outside of the United States. Its international product brand line comprises Marlboro, Merit, Parliament, Virginia Slims, L&M, Chesterfield, Bond Street, Lark, Muratti, Next, Philip Morris, and Red & White. The company also offers its products under the A Mild, Dji Sam Soe, and A Hijau in Indonesia; Diana in Italy; Optima and Apollo-Soyuz in the Russian Federation; Morven Gold in Pakistan; Boston in Colombia; Belmont, Canadian Classics, and Number 7 in Canada; Best and Classic in Serbia; f6 in Germany; Delicados in Mexico; Assos in Greece; and Petra in the Czech Republic and Slovakia. It operates primarily in the European Union, Eastern Europe, the Middle East, Africa, Asia, Canada, and Latin America. The company is based in New York, New York.

Advisors' Opinion:

• [By Diane Alter]

  Dividend Stocks That Increased Payout in September

  Accenture plc (NYSE: ACN) announced a 14.8%, or $0.12 per share, increase to its semiannual dividend. The management consulting firm will now pay a semiannual dividend of $0.93. Shares yield 2.53%. Agruim Inc. (NYSE: AGU) boosted its dividend by $1.00 per share to a total dividend of $3.00 on an annualized basis. Shares of the global retailer of agricultural products now sprout a 3.54% yield. Air Industries Group Inc. (NYSE: AIRI) doubled its dividend to $0.125 per share. The maker of airplane and helicopter parts now floats a lofty yield of 6.6%. Alexandria Real Estate Equities Inc. (NYSE: ARE) upped its dividend 4.6% to $0.68 per quarter for a yield of 4.21%. Banner Corp. (Nasdaq: BANR) boosted its quarterly dividend 25% to $0.15 per share. The parent company of Banner and Islander Bank serves the Pacific Northwest region. Brady Corp. (NYSE: BRC) lifted its quarterly dividend 2.6% to $0.78 per share. It was the 28th straight dividend increase from the identification solutions company. Shares yield 2.57%. Campbell Soup Co. (NSE: CPB) raised its quarterly dividend to $0.31 per share, up from $0.29. The company last raised its dividend in November 2010. Shares yield a hearty 3.06%. CLARCOR Inc. (NYSE: CLC) raised its quarterly dividend 26% to $0.17 per share. It's the largest percentage increase from the Tennessee-based diversified marketer of mobile filtration and packaging products in the last 20 years, and it continues the company's consecutive streak of increasing dividends for the last 30 years. Franklin Resources Inc. (NYSE: BEN) boosted its quarterly dividend 2.6% to $0.10 per share. Frisch's Restaurants Inc. (NYSE: FRS) increased its quarterly dividend 12.5% to $0.18. Shares yield 3.10% The Goodyear Tire & Rubber Company (NYSE: GT), in a move that suggests good times are ahead, reinstated its dividend at $0.05 per share. Good

5 Best Blue Chip Stocks To Buy Right Now: Apple Inc.(AAPL)

Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and value-added resellers. In addition, it sells third-party Mac, iPhone, iPad, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and other accessories and peripherals through its online and retail stores; and digital content and applications through the iTunes Store. The company sells its products to consumer, small and mid-sized business, education, enterprise, government, and creative markets. As of September 25, 2010, it had 317 retail stores, including 233 stores in the United States and 84 stores internationally. The company, formerly known as Apple Computer, Inc., was founded in 1976 and is headquartered in Cupertino, California.

Advisors' Opinion:

• [By Rick Munarriz]

  A month after Facebook (NASDAQ: FB  ) was reportedly making a $1 billion offer for Waze -- and several months after Apple (NASDAQ: AAPL  ) praised Waze as a near-term fix to its Apple Maps fiasco before being mentioned in buyout chatter itself -- Google (NASDAQ: GOOG  ) whisked away the fast-growing app maker.

Top 5 Stocks To Buy For 2014: Chevron Corporation(CVX)

Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment involves in the exploration, development, and production of crude oil and natural gas; processing, liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and transportation, storage, and marketing of natural gas, as well as holds interest in a gas-to-liquids project. The Downstream segment engages in the refining of crude oil into petroleum products; marketing of crude oil and refined products primarily under the Chevron, Texaco, and Caltex brand names; transportation of crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. It a lso produces and markets coal and molybdenum; and holds interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts, as well as involves in cash management and debt financing activities, insurance operations, real estate activities, energy services, and alternative fuels and technology business. Chevron Corporation has a joint venture agreement with China National Petroleum Corporation. The company was formerly known as ChevronTexaco Corp. and changed its name to Chevron Corporation in May 2005. Chevron Corporation was founded in 1879 and is based in San Ramon, California.

Advisors' Opinion:

• [By Travis Hoium]

  Dow components ExxonMobil (NYSE: XOM  ) and Chevron (NYSE: CVX  ) have actually fallen slightly on oil's new high because they may not see a big benefit from higher prices. Oil is becoming more expensive to extract, and demand isn't rising rapidly, which would lead to higher profits from refining, retail, and extraction. Instead, demand is flat or declining slightly in the developed world, and there are big worries that supply disruptions will hit the Middle East as violence spreads there.

• [By Dan Caplinger]

  However, looking more deeply at the numbers once again reveals the huge influence that rising energy prices have had on the CPI. Energy prices rose 3.4% during the month, with gasoline prices jumping more than 6%. Yet both Chevron (NYSE: CVX  ) and ExxonMobil (NYSE: XOM  ) are trading lower today despite rising oil prices, showing that even energy stocks don't always benefit from inflationary pressure, because higher prices spur oil consumers to reduce their consumption. When you take out the volatile food and energy segments, core CPI rose just 0.2%, adding up to a 1.6% gain over the past year. That level is low enough to give the Federal Reserve latitude to maintain its accommodative monetary policies a bit longer.

• [By Jim Jubak]

  First, the cancellation of Shell's project emphasizes the huge first-mover advantage that Cheniere has. Future plants to be built by competitors will face much higher construction costs. Inflated labor costs have already resulted in a 20% cost overrun for Chevron's (CVX) Gorgon liquefied natural gas project in Australia. And a Canadian oil sands boom—that has pushed wages for oil industry construction workers in Canada to 60% more than in the United States—is giving pause to companies such as Chevron, Royal Dutch, and National Petroleum, which have as many as nine liquefied natural gas terminals on Canada's West Coast on the drawing boards.

5 Best Blue Chip Stocks To Buy Right Now: McDonald's Corporation(MCD)

McDonald?s Corporation, together with its subsidiaries, operates as a worldwide foodservice retailer. It franchises and operates McDonald?s restaurants that offer various food items, soft drinks, coffee, and other beverages. As of December 31, 2009, the company operated 32,478 restaurants in 117 countries, of which 26,216 were operated by franchisees; and 6,262 were operated by the company. McDonald?s Corporation was founded in 1948 and is based in Oak Brook, Illinois.

Advisors' Opinion:

• [By Steve Symington]

  McDonald's (NYSE: MCD  ) , for example, also took a hit during April, as same-store sales for its Asia/Pacific region fell 2.9% that month, thanks largely to weakness in China. Of course, when we remember McDonald's currently operates less than one-third the total number of locations in China as Yum! Brands, combined with the fact that Mickey D's most significant market here in the U.S. is showing remarkable strength, it should come as no surprise that McDonald's investors weren't nearly as concerned as those with an interest in Yum! stock.�

5 Best Blue Chip Stocks To Buy Right Now: Visa Inc.(V)

Visa Inc., a payments technology company, engages in the operation of retail electronic payments network worldwide. It facilitates commerce through the transfer of value and information among financial institutions, merchants, consumers, businesses, and government entities. The company owns and operates VisaNet, a global processing platform that provides transaction processing services. It also offers a range of payments platforms, which enable credit, charge, deferred debit, debit, and prepaid payments, as well as cash access for consumers, businesses, and government entities. The company provides its payment platforms under the Visa, Visa Electron, PLUS, and Interlink brand names. In addition, it offers value-added services, including risk management, issuer processing, loyalty, dispute management, value-added information, and CyberSource-branded services. The company is headquartered in San Francisco, California.

Advisors' Opinion:

• [By Ben Levisohn]

  Shares of Alcoa have jumped 4.3% to $8.28 today at 1:26 p.m, which would have made it the Dow’s best performer today instead of AT&T (T) and its 2.8% gain. Still it’s hard to complain too much today as the Dow’s three new members are having solid, if not extraordinary, days. Nike (NKE) has jumped 1.3% after its CEO told analysts that his company could have $30 billion of sales in 2015 and $36 billion by 2017. Goldman Sachs (GS), meanwhile, has gained 1.3% to $155.04 and Visa (V) has advanced 0.8% to $183.98.

3 Stocks Under $10 Moving Higher

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>4 Big Stocks on Traders' Radars

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Stocks With Big Insider Buying

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside today.

Baltic Trading

Baltic Trading (BALT) operates a fleet of dry bulk ships that transport iron ore, coal, grain, steel products and other dry bulk cargoes.. This stock closed up 5.5% to $5.72 in Thursday's trading session.

Thursday's Range: $5.39-$5.80

52-Week Range: $2.85-$5.80

Thursday's Volume: 1.13 million

Three-Month Average Volume: 1.08 million

>>4 Stocks Triggering Breakouts on Unusual Volume

From a technical perspective, BALT soared higher here with above-average volume. This move briefly pushed shares of BALT into breakout and new 52-week-high territory, since this stock flirted with some near-term overhead resistance at $5.75. Shares of BALT hit an intraday high of $5.80 before closing just below that level $5.72. Market players should now look for a continuation move higher in the short-term if BALT can manage to take out Thursday's high of $5.80 with high volume.

Traders should now look for long-biased trades in BALT as long as it's trending above Thursday's low of $5.39 or above its 50-day at $5 and then once it sustains a move or close above $5.80 with volume that hits near or above 1.08 million shares. If we get that move soon, then BALT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $6.50 to $7.50.

Tianli Agritech

Tianli Agritech (OINK) raises, breeds and markets hogs. The company sells its products to distributors and large-scale swine farms. This stock closed up 3.5% to $2.31 in Thursday's trading session.

Thursday's Range: $2.22-$2.31

52-Week Range: $0.50-$2.47

Thursday's Volume: 15,000

Three-Month Average Volume: 148,922

>>5 Big Trades for Post-Taper Gains

From a technical perspective, OINK spiked notably higher here right above some near-term support at $2.07 with lighter-than-average volume. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of 75 cents per share to its recent high of $2.47. During that move, shares of OINK have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of OINK within range of triggering a major breakout trade. That trade will hit if OINK manages to take out some near-term overhead resistance levels at $2.34 to its 52-week high at $2.47 with high volume.

Traders should now look for long-biased trades in OINK as long as it's trending above some key near-term support at $2.07 or above its 50-day at $1.85 and then once it sustains a move or close above those breakout levels with volume that hits near or above 148,922 shares. If that breakout triggers soon, then OINK will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $3 to $3.50.

LightIn TheBox

LightIn TheBox (LITB), an online retailing company, offers products in the three core categories of apparel, small accessories and gadgets, and home and garden. This stock closed up 5.7% to $8.12 in Thursday's trading session.

Thursday's Range: $7.50-$8.28

52-Week Range: $6.18-$23.38

Thursday's Volume: 734,000

Three-Month Average Volume: 504,100

>>5 Hated Earnings Stocks You Should Love

From a technical perspective, LITB spiked sharply higher here and broke out above some near-term overhead resistance $7.83 with above-average volume. This move is quickly pushing shares of LITB within range of triggering another big breakout trade. That trade will hit if LITB manages to take out Thursday's high of $8.28 and its 50-day moving average of $8.64 with high volume.

Traders should now look for long-biased trades in LITB as long as it's trending above Thursday's low of $7.50 or above more support at $7 and then once it sustains a move or close above those breakout levels with volume that hits near or above 504,100 shares. If that breakout hits soon, then LITB will set up to re-fill some of its previous gap down zone from November that started at $10.89.

To see more stocks that are making notable moves higher today, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>3 Hot Stocks to Trade (or Not)

>>5 Cash-Rich Stocks That Could Pay Triple the Gains in 2014

>>4 Stocks Rising on Unusual Volume

Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including

CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

Teradata Corporation (NYSE:TDC): Lower Cost Platforms Could Curtail Growth Rates

Teradata Corporation (NYSE:TDC) may face the challenge of customers grappling with higher costs maintaining its systems as they look to optimize their budgets for new projects heading into 2014. There are complex sets of circumstances around Hadoop and the impact on traditional vendors such as Teradata.

Teradata is a provider of enterprise data warehousing (EDW), including enterprise analytic technologies and services, and with the acquisition of Aprimo in early 2011, it became a provider of integrated marketing software. Teradata's data warehousing solutions are comprised of software, hardware, and related business consulting and support services.

[Related -International Business Machines Corp. (IBM): A Massive Top In An Ex-Bellwether]

The consensus on the impact from Hadoop on traditional EDW vendors is that the technology is encroaching on workloads of more expensive technologies.

Sterne Agee analyst Alex Kurtz said his consultants suggested that 20-25 percent of their deal flow during 2013 was related to Hadoop but suggested few instances where the new technology was cannibalizing existing technologies. From their perspective, the lack of tools to integrate into traditional software platforms and the lack of internal talent on the technology has restricted Hadoop from moving into core EDW functions.

They have seen, to date, deployment of Hadoop as a data capture engine that would funnel data into a traditional EDW (in some regard aligning with Teradata management's historical comments).

[Related -Oracle Corporation (NYSE:ORCL) Q2 Earnings Preview: What To Expect?]

That said, Teradata cost draws scrutiny While consultants have an institutional bias toward competitive offerings to Teradata, it was clear from the call that the desire from existing Teradata customers to find better value, when possible, is driving deal flow for their firms.

One of the key factors that act against Teradata is when a customer wants to upgrade to a Teradata solution, he n! eeds to upgrade the whole hardware stack, which might not be feasible.

Looking to fiscal 2014 product growth of 8.2 percent (versus Street at 7.3 percent), Kurtz certainly could see moments of outperformance as the sales organization recovers from a down 7 percent in fiscal 2013.

Yet, recovering the growth multiple in the mid to high teens could be a challenge given growth in alternative, lower cost platforms such as from Amazon.com, Inc. (NASDAQ:AMZN).

Amazon's combination offering of Redshift, EMR (Elastic Map Reduce) and DynamoDB is hurting all engineered system vendors including Oracle's (NASDAQ:ORCL) Exadata, IBM's (NYSE:IBM) Netezza and Teradata.

Global Equities Research analyst Trip Chowdhry notes that he has not come across any customer, who will increase their spend on Teradata offerings. Specifically, he said Wells Fargo, Bank of America and eBay will spend less on Teradata in 2014 versus 2013. Chowdhry says that Teradata revenues probably could decline between 5 and 9 percent for the next 2 - 3 years.

Moreover, Teradata's longer-term outlook for business created more uncertainty around the prospects of returning to improved product growth rates.

The company noted that 20-30 larger transactions not only slipped out of the third quarter 2013 but are now considered part of the fiscal 2014 outlook. In addition, the company provided (and acknowledged for the first time) that a sub-segment of their installed base has transitioned to Hadoop - with management providing a 4-8 percent range.

Kurtz said when asked about the longer-term outlook, management indicated their ability to reclaim 10 percent total revenue growth, but as the discussion continued, the set of circumstances around Hadoop, timing of new products like Aster and Capacity on Demand made it difficult to judge the timing.

Certainly there are positives, with growth in the US at 8 percent and most of the weakness isolated to Japan and other emerging markets, which is not the majority of reven! ue today.!

However, the acknowledgment of Hadoop as an issue validates many bear views about death by a thousand cuts. When management was asked about Big Data products like Aster, there continues to be hesitancy to outline real numbers around higher-growth platforms.

Kurtz believes that Teradata reclaiming a historical multiple would be challenging heading into fiscal 2014 as normalized product growth likely sub 10 percent. It would be a big task without a significant rebound in product growth rates starting in the first half of 2014.

Teradata sees fiscal 2013 revenue growth flat with last year and non-GAAP EPS of $2.70-$2.80. Street expects earnings of $2.74 a share on revenue of $2.67 billion.

TDC stock trades 13.6 times its forward earnings versus historically in the 15-25 times range. The stock dropped 34 percent this year and traded between $39.16 and $69.65 during the past 52-weeks.

Stocks Going Ex-Dividend on Thursday, December 19 (GE, LTC, PKG, More)

Ex-dividend dates are very important to dividend investors, since you must purchase a stock prior to its ex-dividend date in order to receive its upcoming dividend payout. For more information, check out Everything Investors Need to Know About Ex-Dividend Dates.

Below we highlight 5 big-name stocks going ex-dividend on December 19.

1. General Electric

General Electric (GE) offers a dividend yield of 3.26% based on Tuesday’s closing price of $27.03 and the company's quarterly dividend payout of 22 cents. The stock is up 26.66% year-to-date. Dividend.com currently rates GE as “Neutral” with a DARS™ rating of 3.4 stars out of 5 stars.

2. LTC Properties

LTC Properties (LTC

Stocks to Watch: Sprint, AIG, Solta Medical

Among the companies with shares expected to actively trade in Monday’s session are Sprint Corp.(S), American International Group Inc.(AIG) and Solta Medical Inc.(SLTM)

Sprint is working toward a possible bid for rival T-Mobile US Inc.(TMUS), the Wall Street Journal reported, setting the stage for a telecom merger that if permitted by regulators would leave the U.S. wireless market dominated by three big companies. Sprint is studying regulatory concerns and could launch a bid in the first half of next year, the Journal reported. Sprint shares were up 4% to $8.77 premarket and T-Mobile was down 14 cents at $27.50. American depositary shares of Deutsche Telekom AG(DTE.XE), which holds a majority stake in T-Mobile, were up 2.8% at $16.05.

AIG confirmed it will sell its stake in International Lease Finance Corp to aircraft-leasing company AerCap Holdings N.V(AER). for $5.4 billion in cash and stock.

Endo Health Solutions Inc.(ENDP) agreed to acquire pharmaceutical company NuPathe Inc.(PATH) for about $105 million to gain the company’s new migraine treatment. Endo will acquire NuPathe for $2.85 per share, a 24% premium to its close of $2.30 on Friday. NuPathe shareholders will receive rights to receive additional cash payments of up to $3.15 per share if the company’s migraine treatment Zecuity meets certain sales milestones. NuPathe shares were up 51% at $3.48 in premarket trading.

Harvest Natural Resources Inc.(HNR) agreed to sell all the company’s interest in Venezuela for $400 million in cash, as the energy company moves forward with its plans to sell itself.  Shares were up 24% at $4.89 premarket.

Valeant Pharmaceuticals International Inc.(VRX.T) agreed to acquire medical device company Solta Medical Inc. (SLTM) for $250 million to increase its offerings in the growing aesthetic medicine market. Valeant is offering Solta shareholders $2.92 a share, a 40% premium to its Friday close of $2.09. Solta shares were up 39% at $2.91 premarket.

Allegheny Technologies Inc.(ATI) intends to close a Connecticut facility in 2014, a move the metal processor said will result in a $9.2 million charge to be recorded in the fourth quarter.

Asset management firm The Carlyle Group LP(CG) agreed to invest $200 million over three years to fund an oil-and-gas exploration companies offshore drilling programs in New Zealand and the Union of the Comoros.

Can Goldman Sachs Continue to Outperform?

With shares of Goldman Sachs (NYSE:GS) trading around $170, is GS an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Goldman Sachs is engaged in investment banking, securities, and investment management. It provides a range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments, and high net worth individuals. The company operates in four segments: investment banking, institutional client services, investing and lending, and investment management. Through its segments, Goldman Sachs provides valuable investment services to consumers and companies worldwide.

Goldman Sachs lowered shares of RWE AG (NASDAQ:RWEOY) from a buy rating to a neutral rating in a report released. The company has also modified their ratings on a number of other stocks in the few days. The firm upgraded shares of IAMGOLD Corp. from a sell rating to a neutral rating. Also, Goldman Sachs initiated coverage on shares of MarkWest Energy Partners. They issued a buy rating on that stock. Finally, Goldman Sachs initiated coverage on shares of DCP Midstream Partners, LP. They issued a buy rating on that stock.

T = Technicals on the Stock Chart Are Strong

Goldman Sachs stock has made significant progress in the last several quarters. The stock is currently trading near highs for the year and look poised to continue. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Goldman Sachs is trading above its rising key averages, which signal neutral to bullish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Goldman Sachs options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Goldman Sachs options	24.84%	93%	90%

What does this mean? This means that investors or traders are buying a very significant amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
January Options	Flat	Average
February Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and low demand by put buyers or high demand by put sellers, all neutral to bullish over the next two months. To summarize, investors are buying a very significant amount of call and put option contracts and are leaning neutral to bullish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Increasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Goldman Sachs’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Goldman Sachs look like and more importantly, how did the markets like these numbers?

	2013 Q2	2013 Q1	2012 Q4	2012 Q3
Earnings Growth (Y-O-Y)	1.05%	107.87%	9.44%	203.29%
Revenue Growth (Y-O-Y)	-19.51%	0.21%	1.42%	52.69%
Earnings Reaction	-2.42%	-1.69%	-1.61%	4.05%

Goldman Sachs has seen increasing earnings and revenue figures over the last four quarters. From these numbers, the markets have been happy about Goldman Sachs’s recent earnings announcements.

P = Excellent Relative Performance Versus Peers and Sector

How has Goldman Sachs stock done relative to its peers, JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), Morgan Stanley (NYSE:MS), and sector?

	Goldman Sachs	JPMorgan Chase	Citigroup	Morgan Stanley	Sector
Year-to-Date Return	42.59%	31.96%	35.82%	71.36%	37.79%

Goldman Sachs has been a relative performance leader, year-to-date.

Conclusion

Goldman Sachs is a bellwether in the financial sector that strives to provide valuable financial products and services to consumers and businesses around the world. The company lowered shares of RWE AG from a buy rating to a neutral rating in a report released. The stock has been moving higher in recent years and is currently trading near highs for the year. Over the last four quarters, earnings and revenues have been on the rise, which has left investors happy about Goldman Sachs's earnings announcements. Relative to its peers and sector, Goldman Sachs has been a relative performance leader year-to-date. Look for Goldman Sachs to OUTPERFORM.

Is Australia Still Open for Business?

The Australian government’s recent rejection of Archer Daniels Midland Co’s (NYSE: ADM) AUD3.2 billion bid to acquire GrainCorp Ltd (ASX: GNC, OTC: GRCLF) has left some skeptics wondering whether Australia truly is open for business again, as Prime Minister Tony Abbott declared upon prevailing in the country’s recent federal election.

That’s not unreasonable considering that the decision, which took many investors by surprise, came little more than two months after the Liberal-National Coalition’s ascent to power. It also creates a potentially difficult precedent for a number of other pending investments by foreign-owned companies, particularly bids by some of China’s state-owned companies.

Although Treasurer Joe Hockey said the government’s decision to scuttle the deal was based on the fact that the grain industry is still in a transitional phase since its 2008 deregulation, it’s hard to dismiss politics as the culprit. The rural-based National cohort of the Coalition was strongly opposed to the deal, and though Mr. Hockey had previously stated he would not be “bullied” into his decision, when it comes to politics it’s hard to assume that isn’t what ultimately happened.

Even so, Australia’s new government is aggressively pursuing the repeal of both the carbon tax and the Minerals Resource Rent Tax (MRRT), which should help steady the country’s all-important resource sector. And the government has also been pushing for long-stalled bilateral free-trade agreements with regional peers, such as China, Japan and South Korea. As such, it’s too soon to dismiss the Coalition’s business bona fides, except in those instances where intra-party politics will likely take precedence.

In the meantime, it’s worth pondering how the government’s spurning of ADM could affect some of the other deals before its Foreign Investment Review Board (FIRB), which has initial oversight on each bid before the treasurer’s final decision. That’s because a high-profile rejection of a Chinese acquisition would likely stymie the government’s effort to negotiate a free-trade agreement with China, which Mr. Abbott has said he hoped would be in place within 12 months.

For now, it appears the government has taken a pragmatic approach toward relations with its largest trading partner, by relaxing restrictions on state-owned Yanzhou Coal Mining Co’s (NYSE: YZC, Hong Kong: 1171) stake in its Australian subsidiary Yancoal Australia Ltd (ASX: YAL). As a condition for approving its AUD3.3 billion acquisition of Felix Resources Ltd back in 2009, Yanzhou had agreed to list its Australian-domiciled assets on the ASX, which it did via Yancoal, and eventually pare its holdings in this entity to 70 percent of shares outstanding.

But Yanzhou currently owns 78 percent of Yancoal, which would have required it to find a buyer for a portion of its stake at a time when coal prices remain depressed. As such, it petitioned the FIRB to remove the restriction and allow it to purchase the balance of shares it didn’t already own. Earlier this week, Mr. Hockey agreed to lift the restriction, while stating the government had no “in-principle objection” to Yanzhou eventually increasing its stake to 100 percent.

The treasurer was careful to note that, unlike the ADM deal, the government did not view this arrangement as contrary to the national interest and reiterated that similar deals involving foreign investors would be approved as long as they fulfilled this criterion.

Still, the new government will have to establish more of a track record in this area to remove uncertainty in the wake of its decision on ADM. For instance, Mr. Abbott has also said that he prefers investments from foreign companies that promise to build enterprises and create jobs rather than simply acquire existing companies.

At the same time, Mr. Hockey may have undermined the FIRB’s negotiating power by showing that any agreements with the regulator can always be renegotiated at a later juncture, especially if they involve companies from Australia’s largest trading partner.

But the bottom line is that we still believe Australia is indeed open for business again, though politics will occasionally intervene.

Danger Zone: Momentum Investors and the Financial Sector

 

Check out this week’s Danger Zone Interview with Chuck Jaffe of Money Life and MarketWatch.com.

Regulators are cracking down on the financial sector. As they dole out punishments that fit the crimes, regulators are finally closing many of the illegal trading loopholes that have driven so much of Wall Street profits over the past decade. A side-effect of these changes is that investors are beginning to abandon the crowded momentum trading strategies to which they’ve grown so accustomed and return to good old-fashioned value investing.

Enhanced Regulatory Enforcement

Last week, the Department of Justice reached a landmark settlement with JPMorgan Chase (NYSE: JPM) that results in the bank paying $13 billion for wrongdoing and misrepresentation before and during the financial crisis. More importantly, JPM admitted guilt, which may open it up to more class action lawsuits and fines.

Both the scale of the fine and the admission of wrongdoing would have been inconceivable just a few years ago. In 2010, Goldman Sachs (NYSE: GS) received a penalty of only $550 million for similar charges, and it escaped without admitting or denying the allegations. In 2011, Citigroup (NYSE: C) was set to settle with the SEC for only $285 million and no admission of wrongdoing until a federal judge rejected the deal.

The size of the JPM settlement would have been shocking a decade ago. For comparison, JPM’s $13 billion settlement is significantly larger than the post-tech-bubble fines paid by all financial sector firms from 2001-2003. It is nearly ten times larger than $1.4 billion fine given the ten largest broker-dealers for the Global Settlement reached in 2003. This Global Research Settlement fine is relatively minuscule despite the fact that the SEC had evidence of senior analysts at the offending banks fraudulently boosting stock ratings.

Figure 1: Global Research Settlement Fines Breakdown

Sources: http://www.sec.gov/news/press/2003-54.htm

Clearly, regulators are reacting more forcefully to the financial crisis of 2008 than they did to the dotcom bubble. This crackdown is not restricted to those dealing in mortgage-backed securities either. Earlier this month, the hedge fund SAC Capital agreed to plead guilty to insider trading charges and pay $1.8 billion in penalties. SAC was the first Wall Street company to plead guilty to financial wrong-doing charges since the 1980’s, and now some of its individual employees are on trial.

Combined with the conviction and prison sentence of former hedge fund manager Raj Rajaratnam for insider trading, these fines and admissions of guilt send a clear message. Wall Street traders and investment bankers face more scrutiny and harsher enforcement than ever before.

What Does This Mean For the Market?

For one thing, it means less trading. SAC Capital alone often made up around 3% of theaverage daily trading on the NYSE. The restriction of inside information, legal or not, has diminished trading volume in several areas of the market. When Thomson Reuters stopped selling early access to the University of Michigan Consumer Sentiment surveyto high frequency traders, the pre-market volume in the S&P 500 Index ETF (NYSE: SPY) dropped from 200,000 shares in a 10-millisecond window to 400 shares.

Harsher enforcement also means less cash available for these large firms to use for trading. JPM is holding $23 billion in reserves for potential litigation expenses and spent more on legal expenses in 3Q13 than any other expense item. Bloomberg recently reported that the six biggest U.S. banks have piled up $103 billion in legal costs since the financial crisis.

More enforcement also means less market manipulation. A recent Bloomberg articlerevealed that the Justice Department is investigating JPMorgan and several other large banks for potentially manipulating global foreign exchange markets. Regulators are taking an interest in an instant messaging group between analysts at JPM, Citigroup, RBS, and Barclays that was brazenly referred to as ‘The Cartel’. Those four banks accounted for more than 40% of the trading in the foreign exchange market. If their ability to influence price movements gets taken away, the volume of trading would likely decrease. Earlier this year, JPM agreed to pay $410 million to settle accusations of illegal activity in California electricity markets. That settlement is the largest ever reached with the Federal Energy Regulatory Commission since it received new powers in the wake of the Enron Corp. fiasco.

High Volume Momentum Stocks Suffer

As regulators close the loopholes that allowed for these illegal activities, many others (besides those being fined and prosecuted) will suffer.

For one, momentum investors who piggybacked institutional trading trends to bag quick profits on high volume run-ups will be out of luck. These high-flying momentum stockspresent long-term risks that have been routinely ignored over the last decade by investors who have become addicted to the illusion of quick and easy profits. As the trading volume from the Wall Street players dries up, a lot of the hot air in momentum stocks will disappear. Rapid upward price movements will be less frequent while many high-flying stocks drop to earth.

For examples of large investment firms propping up stock prices and fueling large moves, see my recent Danger Zone articles on InnerWorkings (NASDAQ: INWK) and Tangoe (NASDAQ: TNGO). Both stocks had heavy institutional ownership and rapid upward price moves driven by Wall Street propaganda and momentum traders. Soon after we revealed how disconnected the price moves were from the companies’ fundamentals the stocks fell 30+%.

Big broker-dealers, even the divisions not under investigation, will suffer as well. Many of these companies’ activities, like equity research, were tied to and subsidized by the outsized profits from illegal activities. As those funds dry up, so do the businesses that relied on them.

Declining trading volume also hurts revenues. High volume traders are lucrative clients for these brokers, and they won’t like losing them. Even after SAC plead guilty, Bank of America (NYSE: BAC), JPM, and GS continued to do business with the hedge fund. They need to keep that business to keep profits up.

Smaller trading firms could suffer as well. E*TRADE (NASDAQ: ETFC) and Scottrade depend heavily on commissions and transaction fees for their revenue streams. ETFC swung to a loss in 2012 due, at least in part, to an 11% decrease in commissions and fees due to declining trading activity.

Return to Value Investing

Momentum strategies have become increasingly crowded in recent years, but that trend is on a decline. Closing the loopholes for illegal trading and market manipulation means the big hedge funds and banks have less means to  stoke the volume for momentum trades. Recent results from E*TRADE show that individual investors are trading less frequently.

As it becomes harder for institutional investors to beat the market illegally, it will become harder for individual investors to profit from piggybacking off those trades. When this happens, investors large and small will need to find another way to generate returns.

I see a return to value investing coming for the market. We know from Warren Buffet and others that, when done right, value investing can deliver large returns. Though not as sexy as momentum trading, value investing brings peace of mind and long-term trust in one’s decisions. Given all the turmoil and treachery we have seen in the markets, I think investors are ready for some peace of mind and will look increasingly to advisors and strategies they can trust.

Sam McBride contributed to this article.

Disclosure: David Trainer and Sam McBride receive no compensation to write about any specific stock, sector, or theme.

The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

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Billionaire Buzz on Three Tech Stocks

Nuance Communications Inc. is creating a buzz with voice recognition and language-smart technologies that can enhance productivity across a number of industries. The company reported financial results for its fourth quarter of fiscal 2013, ended September 30, 2013, with revenue of $472.2 million (GAAP), up from$468.8 million in the same quarter of fiscal 2012. Also in the fourth quarter of fiscal 2013, the company reported a net loss of ($32.3) million (GAAP), translating as a loss of ($0.10) per share. In the same quarter a year ago, Nuance's net income was $117.6 million, with earnings of $0.36 per diluted share. The company reported $93.5 million cash flow from operations in the reporting quarter, compared to cash flow a year ago at $141.5 million. Here's an update on NUAN, championed by Guru Carl Icahn, and two more technology stocks creating a billionaire buzz.

Nuance Communications Inc. (NUAN)

Down 37% over 12 months, Nuance Communications Inc., the mobile phone voice ad company, has a market cap of $4.43 billion; it trades with a P/B of 1.70.

The current share price is around $14.08. The company does not pay a dividend.

Nuance Communications Inc. provides digital voice and language-recognition technologies for businesses and consumers around the world. The company's applications and services are geared to transforming the way people interact with devices and systems.

Guru Action: 10% owner, Carl Icahn is one of eight gurus holding NUAN as of the third quarter of 2013. Read about his real-time trade.

After his latest add of 0.37% as of Dec. 10, 2013, Icahn's current shares are 59,154,623.

As of Sept. 30, 2013, Ray Dalio made a new buy of NUAN. He bought 32,638 shares at an average price of $19.11 per share, losing 26.3%.

Dalio has a long trading history with NUAN. He has sold out five times over a five-year history. Out of 13 quarters, he saw four quarters of gains in 2008 and 2009.

There is NUAN insider trading to repo! rt.

Track historical pricing, revenue and net income:

SolarWinds Inc. (SWI)

Down 40% over 12 months, SolarWinds Inc. has a market cap of $2.5 billion; shares trade with a P/E of 28.20.

The current share price is $33.29. The company does not pay a dividend.

First incorporated in 1999, SolarWinds Inc. designs, develops, markets, sells and supports enterprise-class IT infrastructure management software. The company's products include software tools and comprehensive software solutions that solve problems common to IT professionals.

Guru Action: In the third quarter of 2013, there were eight gurus holding SWI and active insider trading. Three gurus made new buys in the third quarter.

As of Sept. 30, 2013, top guru stakeholder Lee Ainslie increased his position by 68.97%, buying 2,911,971 shares at an average price of $39.11 per share, taking a loss of 14.9%.

In the same quarter, Jeremy Grantham sold out his holding of 5,200 shares after two losing quarters. He sold 5,200 shares at an average price of $39.11, for a loss of 14.9%.

Track historical pricing, revenue and net income:

Volterra Semiconductor Corp. (VLTR)

Up 30% over 12 months, Volterra Semiconductor Corp. has a market cap of $575.49 million; shares trade with a P/E of 41.20.

The current share price is $22.97. The company does not pay a dividend.

Incorporated in 1996, Volterra Semiconductor Corp. designs, develops, and markets proprietary, high-performance analog and mixed-signal power management semiconductors for the computing, storage, networking, and consumer markets.

Guru Action: As of Sept. 30, 2013, three gurus hold VLTR and there is recent insider selling.

In the third quarter of 2013, Chuck Royce sold out his VLTR after three quarters of gains. He sold 1,161,920 shares at an average price of $18.84! for a ga! in of 21.9%.

In the same quarter, Mario Gabelli made a new buy of 417,900 shares at an average price of $18.84, for a gain of 21.9%.

Track historical pricing, revenue and net income:

GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.

If you are not a Premium Member, we invite you for a 7-day Free Trial.

About the author:Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

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Treasury closes the book on GM bailout with final stock sale

NEW YORK (CNNMoney) The Treasury Department has sold its final stake in General Motors, closing the book on its 2009 bailout of the auto industry. GM has been revived and is now profitable, but taxpayers are out more than $10 billion dollars.

Treasury Secretary Jack Lew announced the final stock sale late Monday afternoon, saying that Treasury ultimately recouped $39 billion through the sale of shares, dividends and loan repayments since 2009. But the government pumped $49.5 billion into GM to help it get through a bankruptcy reorganization.

Treasury lost an estimated $1.3 billion in its bailout of Chrysler Group.

Still, the bailouts may have been a good deal for both the economy and the Treasury.

Lew said that if both companies had gone out of business, which was a serious risk in 2009, it would likely have caused widespread business failures among suppliers across the country. Experts said that it could have even forced other automakers such as Ford Motor (F, Fortune 500) into bankruptcy, due to a lack of auto parts.

Lew said the government also would have been on the hook for pension payments for retired autoworkers that were backed by the Pension Benefit Guaranty Corp., a federal agency.

The failure of GM and Chrysler would have cost the federal government between $39 billion to $105 billion in lost tax revenues as well as assistance to the unemployed, according to a study released Monday by the Center for Automotive Research, a Michigan think tank.

"Our goal was never to make a profit but to stabilize the auto industry," said one Treasury official speaking to reporters on background Monday. "By any measure, we succeeded."

The government initially had a 61% stake in GM when the company emerged from bankruptcy in 2009, leading critics of the bailout to dub it "Government Motors." It ! started to sell that stake with GM's November 2010 initial public offering.

The timing of the stock sale is in keeping with plans announced in January.

GM (GM, Fortune 500) shares are up more than 40% so far this year. The company has earned nearly $20 billion in net income since 2010, the year it returned to profitability after emerging from bankruptcy.

GM says it has invested $8.8 billion into its U.S. plants since 2009, which resulted in the company either adding or maintaining 25,500 jobs at those facilities.

"We will always be grateful for the second chance extended to us and we are doing our best to make the most of it," said GM CEO Dan Akerson.

Akerson and other GM executives could be major beneficiaries of the end of the bailout. Until now the pay of GM executives was monitored by Kenneth Feinberg, the special master overseeing bailed out companies. Under Feinberg, Akerson got about $11.1 million in total compensation in 2012, which was about half the $21 million that Ford CEO Alan Mulally was paid.

Best Performing Companies To Buy Right Now

Investors in the biotechnology sector probably don't need any antidepressants. Many biotechnology stocks are namely among the best performing across the stock market. Over the last 5 years, the biotechnology index trackers tripled in price. But did all biotechnology companies flourish? We discovered a small company that Wall Street has forgotten about but in fact is well positioned to become one of the greatest developers of medical technology that allows patients to produce, within their bodies and on a long-term basis, their own natural human protein therapy for the treatment of a range of chronic diseases such as anemia and hepatitis C. The industry in which they operate is worth billions of dollars. The company is Medgenics (MDGN) and this article explains why this stock is a must have for investors who are searching for a highly skewed risk/reward investment.

Best Performing Companies To Buy Right Now: Lindeteves Jacoberg Ltd (LIJO.SI)

Lindeteves-Jacoberg Limited is an investment holding company. The Company is engaged in the provision of management services to its subsidiaries. The Company is engaged in the the distribution of electric motors. The Company operates in three geographical segments: Asia Pacific, United Kingdom and North America. The Company�� immediate holding company is ATB Austria Antriebstechnik AG. The Company�� ultimate holding company is Wolong Holding Group Co. Ltd. The subsidiaries of the Company include BCUK,(United Kingdom), B C Canada,(Canada), Brook Crompton USA Inc. and Western Electric Asia, (Singapore). BCUK is engaged in the distribution of electric motors in United Kingdom. BC Canada is engaged in the distribution of electric motors in Canada.

Best Performing Companies To Buy Right Now: Blue Calypso Inc (BCYP)

Blue Calypso, Inc., formerly JJ&R Ventures, Inc. (JJ&R), incorporated on March 2, 2007, is a development stage company. The Blue Calypso platform consists of two primary components. The Blue Calypso Network, or back-end, includes the data warehouse of ad and related content, the ad rendering engine, endorser portal, brand portal, agency portal, administrative portal, and Web services and communications clusters responsible for receipt and transmission of data and content. The second component is the mobile platform, installed on endorser smartphone devices or accessed via an endorser Web portal, www.calyp.com, and called Calyp. The Calyp mobile application and Website are the portals for endorsers to enter the community, initiate endorsements and interact with other endorsers. The Company owns four registered trademarks in the United States. Blue Calypso Holdings (Texas Corporation) merged into Blue Calypso, Inc. (Delaware Corporation), on December 17, 2011.

On September 1, 2011, Blue Calypso Acquisition Corp., which is a wholly owned subsidiary of the Company, merged with and into Blue Calypso Holdings, Inc., with Blue Calypso Holdings, Inc. On October 17, 2011, the Company merged with and into Blue Calypso, Inc., a Delaware corporation and wholly-owned subsidiary, for the sole purpose of changing its state of incorporation from Nevada to Delaware. Aztec Systems, Inc. provides administrative and technical support services to the Company. The Company outsources the endorser reloadable Visa Debit card processing to an organization that is responsible for filing necessary taxes documents, preserving personally identifying information (PII/PCI) and maintaining and issuing the cash rewards to the endorsers.

The Company competes with MyLikes, Zuberance, WeReward (IZEA), Dunnhumby, BzzAgent, Groupon and Living Social.

Advisors' Opinion:

• [By CRWE]

  Today, BCYP surged (+1.17%) up +0.002 at $.173 with��631,330 shares in play thus far (ref. google finance Delayed: 2:29PM EDT September 26, 2013).

  Blue Calypso, Inc. previously increased its intellectual property portfolio by purchasing proprietary mobile gamification technology in an all-stock transaction for approximately $150,000.

  Blue Calypso has already applied for one new patent based on the integration of this technology with its own platform. Management expects to further develop the intellectual property purchased as well as file a family of patent applications. This new family of patents combined with Blue Calypso�� existing patents, creates an unprecedented IP portfolio in the social media space.

• [By CRWE]

  Today, BCYP surged (+1.29%) up +0.002 at $.157 with 593,972 shares in play thus far (ref. google finance Delayed: 12:00PM EDT September 23, 2013).

  Blue Calypso, Inc. previously increased its intellectual property portfolio by purchasing proprietary mobile gamification technology in an all-stock transaction for approximately $150,000.

  Blue Calypso has already applied for one new patent based on the integration of this technology with its own platform. Management expects to further develop the intellectual property purchased as well as file a family of patent applications. This new family of patents combined with Blue Calypso�� existing patents, creates an unprecedented IP portfolio in the social media space.

Top 10 Growth Companies To Own In Right Now: Nth Amer Palladium Com Npv (PDL.TO)

North American Palladium Ltd. engages in the exploration, mining, and production of precious metal properties in Canada. The company explores for palladium, platinum, gold, nickel, copper, and other metals. Its principal property includes Lac des Iles palladium mine located northwest of Thunder Bay, Ontario. The company was formerly known as Madeleine Mines Ltd. and changed its name to North American Palladium Ltd. in June 1993. North American Palladium Ltd. was founded in 1968 and is headquartered in Toronto, Canada.

Best Performing Companies To Buy Right Now: Woodward Inc.(WWD)

Woodward, Inc. designs, manufactures, and services energy control and optimization solutions for the aerospace and energy markets worldwide. Its Aerospace segment offers pumps, valves, fuel nozzles, metering units, cockpit controls, actuators, motors, and sensors for the management of fuel, air, combustion, and motion systems in commercial, business, and military aircraft, as well as weapons and defense systems. This segment also provides aftermarket repair, overhaul, and other services to commercial airlines, turbine original equipment manufacturer (OEM) repair facilities, military depots, third party repair shops, and end users. It sells its products to OEMs and tier-one prime contractors; and through aftermarket sales of components as provisioning spares or replacements. The company?s Energy segment designs, produces, and services systems and products for the management of fuel, air, fluids, gases, electricity, and motion. Its products include power converters, actuato rs, valves, pumps, injectors, solenoids, ignition systems, governors, electronics, and devices that measure, communicate, and protect low and medium voltage electrical distribution systems for use in industrial gas turbines, aero-derivative turbines, reciprocating engines, electrical grids, wind turbines, and compressors. This segment sells its products OEMs and tier-one prime contractors, through aftermarket sales or replacements; provides other related services to OEM customers, as well as directly to end users or distributors. Woodward, Inc was founded in 1870 and is headquartered in Fort Collins, Colorado.

Advisors' Opinion:

• [By Seth Jayson]

  Woodward (Nasdaq: WWD  ) reported earnings on April 22. Here are the numbers you need to know.

  The 10-second takeaway
  For the quarter ended March 31 (Q2), Woodward missed estimates on revenues and beat slightly on earnings per share.

Best Performing Companies To Buy Right Now: St. Elias Mines Ltd. (SLI.V)

St. Elias Mines Ltd., a development stage company, engages in the acquisition, exploration, and development of natural resource properties. The company primarily explores for gold and silver ores. It holds interests in various properties located in British Columbia, Canada; and Peru. The company is headquartered in Vancouver, Canada.

Small Cap Idera Pharmaceuticals Inc (IDRA): Was Yesterday’s Bounce Overdone? IBB & XBI

Yesterday, small cap biotech Idera Pharmaceuticals Inc (NASDAQ: IDRA) surged 21.89% apparently on news about open enrollment for a clinical trial in what amounts to an orphan drug treatment, meaning its probably worth taking a closer look at the stock as well as consider its performance verses that of biotech ETFs like the iShares NASDAQ Biotechnology Index ETF (NASDAQ: IBB) and SPDR S&P Biotech ETF (NYSEARCA: XBI).

What is Idera Pharmaceuticals Inc?

Small cap Idera Pharmaceuticals is a clinical stage biotechnology company developing a "novel approach" for the treatment of autoimmune diseases and certain genetically defined forms of B-cell lymphoma. The technology platform is based on nucleic acid therapeutics designed to inhibit overactivation of Toll-like receptors. In addition, the company is conducting clinical development of TLR antagonists in autoimmune and inflammatory diseases, and preclinical development of their use in certain genetically defined forms of B-cell lymphoma.

For reference, the iShares NASDAQ Biotechnology Index ETF tracks the Nasdaq Biotechnology Index through 119 holdings while the SPDR S&P Biotech ETF tracks the S&P Biotechnology Select Industry Index through 58 holdings.

What You Need to Know or Be Warned About Idera Pharmaceuticals Inc

Following acceptance of its Investigational New Drug (IND) application by FDA, Idera Pharmaceuticals had announced that enrollment is open for a Phase 1/2 clinical trial of IMO-8400 in patients with Waldenström's macroglobulinemia, a cancer affecting a type of white blood cell called B cells.  

Although its not mentioned in the press release, the Wikipedia entry for Waldenström's macroglobulinemia says that of all cancers involving the same class of blood cell, 1% of cases are WM, that there are fewer than 1,500 cases occurring in the United States annually and that the median age of onset of WM is between 60 and 65 years (with some cases occurring in late teens). In other words, it's a very rare disorder and any treatment developed would have, for better or for worst, orphan drug status.

Looking over Idera Pharmaceuticals' financials, the company has had revenues of $51k (2012), $53k (2011), $16.110M (2010) and $34.52M (2009) for the past four years along with net losses of $19.24M (2012), $23.78M (2011) and $17.96M (2010) plus net income of $7.55M (2009). At the end of last September, Idera Pharmaceuticals had $39.060 million in cash thanks to the closing of a previously announced underwritten public offering of 13,727,251 shares of common stock and pre-funded warrants to purchase up to an aggregate of 4,175,975 shares of common stock. The gross proceeds were expected to be approximately $27.7 million and the company had total current liabilities of $3.02M with not long term debt. So at least the company is not endanger of runing out of cash.

Share Performance: Idera Pharmaceuticals

On Wednesday, small cap Idera Pharmaceuticals surged 21.89% to $2.45 (IDRA has a 52 week trading range of $0.19 to $3.12 a share) for a market cap of $114.48 million plus the stock is up 175.3% since the start of the year and down 65.1% since the start of the year. Her is a quick look at the performance of Idera Pharmaceuticals verses iShares NASDAQ Biotechnology Index ETF and SPDR S&P Biotech ETF:

As you can see, investors would have been much better off investing in the two ETFs.

Finally, here are the latest technical charts from Idera Pharmaceuticals plus the two ETFs:

The BoThe Bottom Line. Certainly Idera Pharmaceuticals rewarded investors yesterday and its not endanger of running out of cash any time soon. But given its performance verses that of both the iShares NASDAQ Biotechnology Index ETF and the SPDR S&P Biotech ETF, conservative investors can probably find better places in biotech to put their money.